CorporatePresentation Mining Resources Convention 29 &30 … · 2017. 8. 28. ·...

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An Emerging Gemstone Miner in Mozambique

ASX: MUS

Corporate PresentationMining Resources Convention29 & 30 August 2017

MUSTANG RESOURCES LIMITED 1

• Market Cap: ~A$35million only listed ruby miner in the world

• Flagship Montepuez Project located next to Gemfields PLC (Pre takeover market cap:~A$300million)

o GEM: US$280million of rough ruby sales from 8 auctions since June 2014

• Mustang identified multiple ruby deposits in 193km2 land package

• Initial bulk sample confirms significant new ruby discovery on recently acquiredlicence

• Plant working at full capacity of ~1,500tpd with consistent daily recoveries of high-quality rubies

• Current ruby inventory of >147,000 cts, up from 500 cts in October 2016

• Mustang on track for first sales revenue with 200,000cts auction in Port Louis,Mauritius 27 to 30 October 2017

• Leading global ruby buyers have confirmed their attendance at the auction

• Additional upside from Caula Graphite Project a shallow high grade graphite deposit

Overview: Mustang Poised For Rapid Growth

MUSTANG RESOURCES LIMITED

LARGEST SHAREHOLDERSRegius Resources Group Ltd, Mr. C van Wyk & Mr. C Jordaan 10.3%

Lanstead Capital L.P 7.8%

Top 20 36%

Mustang Corporate Overview

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*Class E Performance Rights in favour of vendors of Balama Graphite Project. Vest upon proving a50Mt JORC Compliant Inferred & Indicated Resource @ >5% TGC on any of the graphite licencesheld by Balama.

Directors: I. Daymond (Chairman), C. Jordaan (Managing Director), C. vanWyk (Non-Exec), P. Spiers (Non-Exec)

# Note Major Option Classes: 66.7million 3.5cent Listed Options expiring 25/01/2020; 38.7mil6.2cent options expiring 20/07/2020; 19mil 7.5cent options expiring 21/06/2019

MUSTANG RESOURCES LTD ASX Code MUS

Shares on Issue 565,618,436

Unquoted Performance Rights* 14,000,000

Options# 152,219,830

Share Price (as at 28 August 2017) A$0.06

Debt (Unsecured Convertible Note Facility, 20% drawn, 0% converted ) A$8,500,000

Market Capitalisation A$35.4million

Number of shareholders (as at 28 August 2017) 2,524

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Montepuez Ruby ProjectNear-Term Cashflow from Bulk Sampling Program

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Tapping into a US$2b-a-year market

• Rubies are the most expensive gemstone after diamonds - with fine rubies+5cts extremely rare

• Before the 2009 discovery of the Montepuez field in Mozambique, supply washighly fragmented and unreliable (Myanmar, Afghanistan, Madagascar)

• Consistency of supply from Montepuez provides opportunity for rapid growth inruby market size

• Global polished ruby market size estimated at US$2billion p.a (2014) – totalcoloured gemstone market (ruby, sapphire & emerald) estimated at US$5.9billion p.a (2015)

• Consumer demand has caused prices of rubies to increase 63% over past 8years **

• Market size continues to grow: Coloured gemstone market grew 13% in 2015 period while diamonds

decreased 17% from US$84billion to US$70billion* Strong demand from US, Europe, India, Thailand and China Record US$54.5million June 2017 Mozambique rough ruby auction

• US$1.2billion imports of coloured gemstones into US market (4.5% of diamondmarket) #

• Mustang market engagement in the USA & Asia has confirmed unmet demandfor ethically-mined rubies Carats: 25.59

Sale Price: US$30,420,000

The ‘Sunrise’ Ruby The ‘Graff’ RubyCarats: 8.62 Sale Price: US$8,372,094

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* Source: Gemfields Annual Report** Source: Gemval Relative Value Index.# Source: Global Mining Observer, Issue 131 July 2015


“Based on my study of the historical record, when it comes toproduction of large, fine gems, there has never been a find of ruby assignificant as what was discovered in Mozambique in 2009. Rightnow, it's raining ruby.” Richard W. Hughes, Red Rain, MozambiqueRuby Pours into the Market. Web article. 2016.www.lotusgemology.com

Mozambique Rubies – “Raining Red”

http://www.lotusgemology.com/


Montepuez – A World-Class Gem Field

• The Montepuez region in Mozambique is ideally positioned to rapidly securea substantial share of the lucrative global ruby market

• Commercial potential highlighted by Gemfields’ success in generating US$280million in ruby sales up to Dec 2016

• Montepuez gaining global prominence as the supply of equivalent qualityrubies from Burma (Mogok) is very scarce

• Montepuez produces a wide variety of qualities for each of the differentmarket segments

• Vast majority gem/facet quality rubies come from secondary deposits(colluvial/elluvial)

Mustang (and its prospecting teams) only mine secondary deposits atpresent

• The Montepeuz ruby field is very extensive, offering prospects of long minelives

Mustang has 193sqkm of highly prospective ground

• Montepuez ruby deposits are typically <15m from surface, free-digging andsimple to process with potential for good in-situ grades

Formula for low-cost, high-margin mining operations

A world-class ruby deposit, brought to global prominence by our

neighbour, Gemfields PLC


•Located within the Montepuez Complex which is part ofthe Mozambique Belt – a unique geological occurrence

•Mustang licences lie along the established NW-SE rubymineralisation trend which also transects the Gemfields’licences

•Primary ruby mineralisation is hosted within amphibolitewhich is considered to have supplied the source ofchromium responsible for the rubies’ red colourisation

•Secondary ruby deposits; initial deposition within one ormore major flooding events + redistribution of the rubiesby elluvial processes (e.g. down-slope weathering)

•Secondary deposits typically contain a much higherproportion of high value (gem quality) rubies compared toprimary deposits

•Mustang currently targets only secondary deposits as asource of high value gem quality rubies

Montepuez Regional Geology

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• Mustang ruby deposits have a soft soil cover ofapproximately 1 to 10 metres overlying the targetgravel horizon which sits above the weatheredbedrock• Gravel 1.0m average thickness in Alpha Deposit

but pinches & swells• New LM01-06 Deposits within modern day

drainage gravels at surface with minimaloverburden

• Colluvial/elluvial style deposits remain open in alldirections; 2nd phase auger drilling programproposed to delineate full extent of rubymineralisation

• Work to date shows potential for multiplecommercial (high grade and high quality) rubydeposits at Montepuez

Montepuez Ruby Project – Geology

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• STRATEGY: Systematically build a resource base & generate significantrevenue whilst doing so

• Auger drilling + bulk sample + auction/tender sales = JORC Resource

• 1,500tpd (~328,000tpa) current processing capacity, up from ~300tpd(average) in January 2017

• Inventory of >147,000cts all sourced from initial processing of materialfrom Alpha & LM01-06 deposits and rubies received from artisanal minerdevelopment program

• New high-grade and shallow ruby deposits excavated (~70,000 tonnestockpile) and being processed in coming months– ruby inventoryexpected to increase significantly

• Initial processing of material from highly prospective new deposits withinnew licence delivering exceptional results

• Auger drilling campaign will continue with goal of estimating mine life withresults of bulk sampling over next 6-12 months helping to establish averagegrades

• Started process of converting exploration and prospecting licences tomining concessions with tenure of 25 years (renewable)

Montepuez Ruby Project

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Montepuez Ruby Project – Inventory Growth

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Ruby Inventory in Carats

Inventory Carats


Montepuez Ruby Project – New Discovery

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• Initial bulk sample confirms significant new rubydiscovery on recently acquired licence

• Shallow secondary deposit, with initial bulksampling delivering gem quality rubies

• Consistent recovery of stones classed in thespecial/premium category

• Extensive secondary ruby mineralisation provenover 3,300m strike (open ended)


• New 35sqkm licence sits between the Montepuezprocessing plant and a key secondary deposit beingmined by Gemfields

• Initial bulk sample pits (LM01-06) yielding high-qualitysecondary rubies

• Exploration test pitting has defined open-ended rubymineralisation over a 2.2km extent

• Processing of 4.5 tonnes of gravel from test pits (NT01to NT23) through mobile jigs has yielded 10.7 cts ofrubies

• Auger drilling program proposed to assist in mappingthe full size of the secondary ruby deposit(s) in thiskey target area and beyond

Montepuez Ruby Project – New Discovery

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Montepuez Ruby Project – Milestones

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June 2017: 120,000cts inventory & New Discovery

July 2017: Upgraded Processing Plant

October 2017: Sale of min 200,000cts at 1st

auction/tender

H1 2018: Maiden JORC Resource

March 2018(est.): 2nd Rough Ruby Auction


Caula Graphite Project

A Spectacular High Grade Graphite Discovery

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Caula Graphite Project – Overview

• Caula Project (licence 6678L) located along strike from world-class Syrah

Resources (ASX: SYR) deposit

• Extremely high-grade results over extensive widths from diamond drilling

completed in Dec 2016

• Exploration program confirmed wide, high grade intervals of up to 26% Total

Graphitic Carbon (TGC)

• Preliminary metallurgical testing & product optimisation just completed with

SGS Perth

• Maiden JORC Resource on Caula in September 2017

• Caula will be one of the highest-grade graphite deposits in the world with

>55% Large & Jumbo flakes in fresh ore

• High grade will enable Mustang to generate a top-quality product at a low

cost, maximising margins and providing protection against any price volatility

• Interest in six additional graphite licences in Mozambique (“Balama Graphite

Project”)

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• Spectacular grades of up to 26% Total Graphitic Carbon (TGC)demonstrate potential for Caula to become a low-cost supplier to thelithium battery industry

• Results include:

• MODD 001: 40m at 15.9%TGC average (inc. multiple intersectionsof 24-25% TGC)

• MODD 002: 14m at 12.9%TGC average (inc. multiple intersectionsof 21-23% TGC)

• MODD 003: 87m at 15.2% TGC average (inc. multiple intersectionsof 25-26% TGC)



• Initial exploration target based on 1 RC hole and EM data indicatedpotential for ~2Mt contained graphite

• Extensive resource upside through additional drillingCaula Graphite Project & Drill hole MODD-003

Caula Graphite ProjectTargeting a High Grade Graphite Resource

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• Metallurgical tests have produced high-grade concentrates (>95% TGC) andexceptional recoveries (96% recovery from fresh rock composite sample) fromthe Caula Graphite Project

• More than 55% of the fresh graphite assayed has been classed as Jumbo andLarge Flake (46% classed as Jumbo and Large Flake for fresh and oxidecomposites combined)

• Tests were conducted using a simple, conventional flowsheet processingsamples with ~13% Total Graphitic Carbon (TGC) head grade

• Results demonstrate Caula’s potential to be a low-cost supplier to theexpandable graphite and lithium ion battery industries

• The TGC recoveries of both samples are expected to improve with:o Further flowsheet optimisation.o Recycling of intermediate tailings streams during locked cycle testing.

Current testwork was carried out under open circuit conditions withreported recoveries excluding graphite from intermediate tailingsstreams.

• Results will underpin maiden JORC Resource scheduled for release inSeptember 2017; scoping study to commence immediately thereafter

Caula Graphite ProjectSuperior Metallurgy Proven with Prelim Testing

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Graphite

Product

Size

Fraction

Fresh Composite Oxide Composite

Mass TGC TC Mass TGC TC

µm % % % % % %

Jumbo

Flake300 23.8% 97.90 98.00 13.2% 97.20 97.50

Large

Flake180 31.2% 97.26 97.46 24.6% 96.19 96.69

Medium

Flake150 9.9% 97.30 97.60 7.6% 95.90 96.50

Fine

Flake75 22.5% 96.07 96.41 43.2% 94.85 95.62


Premier ruby project in a world-class gemstone province

Management team with in country experience & “skin in the game”

First sales revenue targeted for 27 to 30 October 2017 through auction/tender a provensales methodology

Leading global ruby buyers have confirmed their attendance at the inauguralauction

Outstanding exploration upside and growth potential

Significant new ruby discovery where Mustang is recovering large gem-quality stonesfrom a shallow deposit

Significant additional upside from Tier-1 High Grade Caula graphite project

Summary: Key Investment Takeaways


Disclaimer

IMPORTANT NOTICE & DISCLAIMERThese presentation materials and the accompanying verbal presentation (together, the Presentation Materials) have been prepared by Mustang Resources Limited (Company) for sophisticated and professional investors or other persons to whom an offer and issue of securities in theCompany (Securities) may be made without lodgement or approval of a formal disclosure document or other filing. By receiving the Presentation Materials, you acknowledge and represent to the Company that you have read, understood and accepted the terms of this disclaimer.It is the responsibility of all recipients of these Presentation Materials to obtain all necessary approvals to receive these Presentation Materials and receipt of the Presentation Materials will be taken by the Company to constitute a representation and warranty that all relevant approvalshave been obtained.NOT AN OFFERThese Presentation Materials are for information purposes only. The Presentation Materials do not comprise a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with the Australian Securities and Investments Commission)or any other law. The Presentation Materials also do not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any Securities nor shall they or any part of them form the basis of or be relied upon in connectiontherewith or act as any inducement to enter into any contract or commitment with respect to Securities. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any “US person” (as defined in Regulation Sunder the Securities Act of 1993, as amended (the “US Securities Act”)). The securities in any proposed offering have not been and will not be registered under the US Securities Act, or under any securities laws of any state or jurisdiction of the United States. Accordingly, the securities inany proposed offering may not be offered, or sold, directly or indirectly, within the United States or to, or for the account of benefit of, US persons, except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US statesecurities laws.NOT INVESTMENT ADVICEThe Presentation Materials are not investment or financial product advice (nor tax, accounting or legal advice) and are not intended to be used for the basis of making an investment decision. Recipients should obtain their own advice before making any investment decision.SUMMARY INFORMATIONThe Presentation Materials do not purport to be all inclusive or to contain all information about the Company or any of the assets, current or future, of the Company. The Presentation Materials contains summary information about the Company and its activities which is current as at thedate of the Presentation Materials. The information in the Presentation Materials is of a general nature and does not purport to contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in aprospectus or product disclosure statement or other offering document prepared in accordance with the requirements of Australian law or the laws of any other jurisdiction, including the United States of America. The Company does not undertake to provide any additional or updatedinformation whether as a result of new information, future events or results or otherwise.

FORWARD-LOOKING STATEMENTSCertain statements contained in the Presentation Materials, including information as to the future financial or operating performance of the Company and its projects, are forward looking statements. Such forward looking statements: are necessarily based upon a number of estimatesand assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; involve known and unknown risks and uncertainties that could cause actualevents or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements; and may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, andare or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. The Company disclaims any intent or obligation to publicly update any forward looking statements, whether as a result of new information, futureevents or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements.All forward looking statementscontained in the Presentation Materials are qualified by the foregoing cautionary statements. Recipients are cautioned that forward looking statements are not guarantees of future performance and accordingly recipients are cautioned not to put undue reliance on forward lookingstatements due to the inherent uncertainty therein.NO LIABILITYThe Company has prepared the Presentation Materials based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in thePresentation Materials. To the maximum extent permitted by law, the Company, its related bodies corporate (as that term is defined in the Corporations Act 2001 (Commonwealth of Australia)) and the officers, directors, employees, advisers and agents of those entities do not accept anyresponsibility or liability including, without limitation, any liability arising from fault or negligence on the part of any person, for any loss arising from the use of the Presentation Materials or its contents or otherwise arising in connection with it.

COMPETENT PERSON STATEMENTSInformation in this report that relates to the Montepuez Ruby Project’s Exploration Targets, Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Paul Allan, a Competent Person who is a registered member of the South African Council for NaturalScientific Professions (SACNASP), which is a Recognised Professional Organisation (RPO) included in a list posted on the ASX website. Mr. Allan is an independent consultant who was engaged by the company to undertake this work. Mr.Allan has sufficient experience which is relevant tothe style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Allanconsents to the inclusion of the data in the form and context in which it appears.Information in this report that relates to the Balama Graphite Project’s Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Johan Erasmus, a Competent Person who is a registered member of the South African Council for Natural Scientific Professions (SACNASP) which is a Recognised Professional Organisation (RPO) included in a list posted on the ASX website. Mr Erasmus is a consultant of Sumsare Consulting, Witbank, South Africa who was engaged to undertake this work. Mr Erasmus has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results. Mr Erasmus consents to the inclusion of the data in the form and context in which it appears.

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Appendix 2: Board & Senior Exploration Team

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Christiaan Jordaan, Managing Director

• Former CEO and co-founder of Mozambican-focused exploration companyRegius Resources Group

• Regius holds 5.7% of Mustang and 20% direct interest in Montepuez Minerals,the HoldCo of three of the four ruby assets

• Extensive experience managing mining and energy projects in Mozambique

• Member of AICD, holds Commercial Law Degree, former Director of financialservices group in SA

Cobus van Wyk, Director

• CEO and co-founder of the Regius Group of companies

• Holds Bachelor of Marketing (Tshwane University of Technology) and MBA(University of Wales)

• Former senior executive in financial industry and capital markets, working at theJohannesburg Stock Exchange and Bankcorp South Africa

• Qualified portfolio manager and stockbroker, more than 23 years’ experience infinancial services

• 12 years’ experience in mining and exploration in Mozambique

Paul Allan, Independent Consulting Geologist

• Over 25 years’ experience in multi-commodity geology (predominantly preciousstones evaluation)

• Former Project Geologist for Gemfields PLC, where he played a key role in theinitial development of the Montepuez Ruby Project

• Former Regional Exploration Manager for SouthernEra, Senior Project Geologistfor Firestone Diamonds

• Initial experience with Anglo American Research Laboratory (De Beers) inkimberlite mineral chemistry and petrography

Peter Spiers, Non-Executive Director

• Mr Spiers has more than 30 years of international experience in the resources industry spanning exploration, minedevelopment, operations and commercial roles.

• He spent 20 years with Western Mining Corporation (“WMC”), during which time he worked as a senior geologist,project manager and lastly Group Manager – Business Development prior to WMC being acquired by BHP Billiton forA$9.2billion.

• Recently Mr Spiers was Managing Director of Orbis Gold, an ASX-listed West African gold company which was acquiredfor A$170 million in 2015 by SEMAFO Inc. at a 98% bid premium. Mr Spiers is a graduate geologist from the Universityof Melbourne and a Member of the Australasian Institute of Mining and Metallurgy.

Ian Daymond, Non-Executive Chairman

• Mr Daymond practised as a solicitor for more than 41 years as an external or in-house mining andresources lawyer and continues to provide consulting services in the mining and resources sector.

• He was General Counsel and Company Secretary of Delta Gold Ltd for over 11 years which saw thecompany grow from a small gold explorer into one of the largest gold producers in Australia withsignificant platinum and gold mining interests in southern Africa.

• Mr Daymond has significant independent director experience, having served as a non-executivedirector of International Base Metals Ltd with substantial copper interests in Namibia and is theformer chairman of ElDore Mining Corporation Ltd (ASX: EDM), ActivEx Ltd (ASX: AIV) and CopperRange Ltd (ASX:CRJ) and a former non-executive director of Hill End Gold Ltd.

• Mr Daymond was the national chairman of the Australia-Southern Africa Business Council for 3years and has substantial business, legal and corporate government precious, base metals anddiamond projects, not only in Australia but also southern Africa over the past 25 years.

• He is currently the Honorary Consul in NSW for the Republic of Botswana and was an individualmember of the Australia-Africa Mining Industry Group (now called the Australia-Africa Minerals &Energy Group (AAMEG) of which the Company has now become a corporate member) whichpromotes corporate social responsibility principles amongst Australian mining companies withactivities in Africa.


Appendix 2: Tenement Overview

Licence No. Area (km2) Commodity Issue Date Valid UntilInterest/Right to

Earn Interest

8245L 35.0 Rubies 16-12-2016 16-12-2021 65%

4143L 19.2 Rubies 14-12-2011 14-12-2016 # 60%

4258L 4.8 Rubies 21-07-2011 21-07-2019 52.5% to 60%

5030L 134 Rubies 03-09-2013 03-09-2018 52.5%

4661L 147.5 Graphite 11-09-2013 11-09-2018 60%

4662L 94.8 Graphite 01-10-2012 01-10-2017 60%

5873L* 137.8 Graphite 17-11-2014 17-11-2019 60% to 75%*

6636L 45.7 Graphite 16-07-2014 16-07-2019 75%

6678L 31.9 Graphite 18-03-2014 18-03-2019 80%

6363L 75.79 Graphite 18-11-2015 18-11-2020 90%

7560L 127.92 Graphite 21-06-2016 21-06-2021 95%

# Conversion application to Mining Concession submitted (25 year renewable tenure) * Previous agreement cancelled and new agreement signed. Note: licence 5030L contingentacquisition payments to local partner of US$750,000 6 months after bulk sampling startup and US$750,000 12 months after bulk sampling startup. Contingent on licence being transferredto Mozambican SPV (In process). As of 01/17 Bulk Sample on 5030L not yet started. Mustang has a call option to acquire additional 10% in 4258L SPV upon successful conclusion of the bulksampling program for US$1million

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Contact Details

D: +61 (0) 2 9239 3119E: [email protected]

A: Level 10, 20 Martin Place, Sydney NSW 2000 AustraliaWeb: www.mustangresources.com.au

@Mustang_Res

Managing Director – Christiaan Jordaan

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mailto:[email protected]

http://www.mustangresources.com.au/

CorporatePresentation Mining Resources Convention 29 &30 … · 2017. 8. 28. ·...

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